Controversial IPO of Upper Tamakoshi for the locals to be floated from Ashadh 24; 1.05 crore shares to be issued to the locals;IPO for general public to be floated after completion of first phase 

Upper Tamakoshi Hydropower Limited is issuing its controversial Initial Public Offering (IPO) from Ashadh 24, 2075 for the locals of the project affected area. The issue will close on Shrawan 09, 2075.  

The hydropower company is issuing 1,05,90,000 unit shares for the locals of Dolakha district which is 10% of the capital. The interested applicants can apply for a minimum 30 units of shares and maximum 300 unit of shares. 

The locals need to apply by filling the forms and submitting it to the designated collection centers. 

The issue for the locals is the first phase of issue which will be followed by issue of 1,58,85,000 unit shares for the general public which is 15% of the capital. The interested applicants can apply for a minimum 50 units and the maximum number they can apply for is 1000 units. Unlike the locals, the applicants from general public can apply from the banking institutions providing ASBA services. 

The IPO issuance has been in much controversy as the locals of the project affected area had been protesting against the share distribution modality of Upper Tamakoshi’s IPO issuance. 

Citizen Investment Trust and Sunrise Capital have been appointed as the issue manager for the IPO issuance. 

Previously, the hydropower company had issued and allotted 24% shares to the members of Employee Provident Fund, Employees of the institutions providing the loans and employees of Nepal Electricity Authority. It has issued 2.53 crore unit shares worth Rs 2.53 arba in the previous issue. 

The majority share (51%) of Upper Tamakoshi has been hold by four public entities, namely, Nepal Electricity Authority (NEA), Nepal Telecom (NTC), Citizen Investment Trust (CIT) and Rastriya Beema Sansthan (RBS). NEA has 41% stake, NTC has 6% and CIT & RBS each has 2% stake in the Company. Similarly, general public and residents of Dolakha District will have 15% and 10% share respectively. The remaining 24% share is being taken over by contributors in Employees Provident Fund (EPF), NEA & Companys staffs and staffs of financial institutions providing loans. 

The country’s largest hydropower project is located 68km from Charikot, the district headquarters of Dolkha. 

ICRA Nepal has assigned Grade 4 rating to the IPO issuance indicating below average fundamentals. 

The IPO of the Upper Tamakoshi will be the biggest in the capital market of the Nepal in terms of volume of shares. It has been constructing 456-MW hydropower project. It has paid-up capital of Rs 10.59 billion. The tunnel of hydropower project was completed recently after almost five years since the construction started in 2011. The estimated cost of the project was Rs 35.39 arba, however based on latest information it has increased to Rs. 49 arba. It is the largest capacity hydropower project in the country and it has 8.4 km longest tunnel which has been constructed so far.